unsustainable costs (cont)

unsustainable costs (cont)

Our thread seems to be gaining traction.    Moderator David Gregory of Meet the Press was  was questioning Kathleen Sibelius this morning on the economics of health care reform.  She was not very convincing in her answers.  Why?  They still do not know how these “reforms” will be funded.

The Wall Street Journal has an opinion article tomorrow, July 20, on the politics of passing health care reform.  I am not endorsing the Wall Street Journal and its editorials.  But the formulation of the strategy bears scrutiny. In the last six months too much legislation has been passed “because the crisis demands an immediate answer.”  Shock Doctrine evolves.

Health care reform legislative debate has entered a new reality.  This is not a fight between liberal or conservative.  This is not really a fight between Democrats or Republicans, although there are certainly many who would enjoy framing the debate as such.

Mandating health care for all.  Want to glimpse the future?   Massachusetts tried to be a leader.  Be very careful.  This from the Boston Globe also quoted by Kaiser Health News:

A state commission recommended yesterday that Massachusetts dramatically change how doctors and hospitals are paid, essentially putting providers on a budget as a way to control exploding healthcare costs and improve the quality of care.

The 10-member commission, which includes key legislators and members of Governor Deval Patrick’s administration, voted unanimously to largely scrap the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual procedure or visit. That arrangement is widely seen as leading to unneeded tests and procedures.

Instead, the group wants private insurers and the state and federal Medicaid program to pay providers a set payment for each patient that covers all that person’s care for an entire year and to make the radical shift within five years. Providers would have to work within a predetermined budget, forcing them to better coordinate patients’ care, which could improve quality and reduce costs.

We are witnessing the change we were promised.  We are seeing glimpses of future economic philosophy and the size and responsibility of government in the next decade.

You can have quality, you can have quantity, but you cannot have both. You can visit a high-end store offering the best of the best.   But don’t ask for any bargains.   Or you can go to Costco.  But don’t expect any service.  These examples may sound flippant but they are highly relevant.

Let’s talk about Medicare next time.    This from the 2009 Medicare Trustee report:

The financial outlook for the Medicare program continues to raise serious concerns. Total Medicare expenditures were $468 billion in 2008 and are expected to increase in future years at a faster pace than either workers’ earnings or the economy overall. As a percentage of GDP, expenditures are projected to increase from 3.2 percent in 2008 to 11.4 percent by 2083 (based on our intermediate set of assumptions). Growth of this magnitude, if realized, would substantially increase the strain on the nation’s workers, Medicare beneficiaries, and the Federal Budget.

HI tax income and other dedicated revenues are expected to fall short of HI expenditures in all future years. The HI trust fund does not meet our short-range test of financial adequacy, and fund assets are projected to be exhausted in 2017.

It’s all quite sobering …

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